George Will has written an op ed on Empress Casino v. Giannoulias, the important takings case in which I and other property scholars coauthored an amicus brief urging the Supreme Court to hear it. As Will points out, the case involves a challenge to a narrowly targeted Illinois tax that transfers money from four riverboat casinoes to several horse-racing tracks. Will correctly points out that this is an egregious example of special interest legislation transferring wealth from one narrow interest group to another without any justifying public interest.

Unfortunately, Will also somewhat misstates the legal point at issue in the case. At this stage of the litigation, it is not whether the taking of the riverboat casino's money is for a valid "public use," but whether there has been any taking at all. The Illinois Supreme Court's opinion in the case ruled that no tax could ever be a taking. If that ruling is allowed to stand, the Illinois tax will not only be permitted, but the casinos won't even receive any compensation for their losses. More importantly, state governments will be able to circumvent the Takings Clause simply by using taxation to force firms or individuals to do whatever the legislatures want with their property - without compensation. For example, if the state passes a law requiring a property owner to use his land in a particular way, there might well be a taking. But under the Illionis court's reasoning, there could never be a taking if the state achieved the same result by requiring the owner to pay a special tax if he refused to use the land in the way the legislature mandates.

The "public use" issue was also litigated at the state court level. But it is not part of the cert petition presented to the Supreme Court. In my view, Will is correct to suggest that if there is a taking, there is no defensible public use here. Indeed, the tax is a particularly blatant example special interest legislation, one that may have been passed in part because of a payoff to notoriously corrupt Illinois Governor Rod Blagojevich. However, as Will also points out, the Court reaffirmed the position that almost any governmental objective counts as a "public use" in Kelo v. City of New London (2005). Like Will, I hope that the Court eventually revisits and overrules Kelo and previous decisions that have essentially gutted the Public Use Clause. But that's not the issue that the Empress cert petition focuses on.

UPDATE: The Cert petition itself is available here. The petition describes the question presented as:

Whether the State's taking of money from private parties is wholly outside the scope of the Takings Clause.

I object to the phrase "notoriously corrupt" to describe former Gov. Blagojevich. That would imply his corruption is exceptional.

I think it more reasonable to refer to Blago as "notoriously open" or "notoriously candid" or "notoriously stupid". What reason, though, do we have to believe his actions are not routinely mimicked by more subtle and careful but equally corrupt officials throughout the political sphere?

Assuming the race horse interests have good lobbyists, this case itself is a perfect example of Blago-like corruption, but performed under cover of law.

I know people love to frame their questions presented, but that's a pretty misleading one.

If the issue is whether a tax can ever be a taking, you have to tell the Court that's the issue. If you don't like using the word "tax" unadorned, say something like "whether compulsory payments denominated as 'taxes' by the state are wholly outside the Takings Clause" or similar.

But judges don't appreciate when you obfuscate the issue, and overly argumentative and misleading questions presented are a great way to lose a case.

If the issue is whether a tax can ever be a taking, you have to tell the Court that's the issue. If you don't like using the word "tax" unadorned, say something like "whether compulsory payments denominated as 'taxes' by the state are wholly outside the Takings Clause" or similar.

I don't think there is a big difference between your formulation and that of the cert petition. The Illinois Supreme Court decisions didn't distinguish between taxes and other money payments mandated by the government, and indeed the difference between the two is largely a matter of labeling.

I have to agree with Dilan Esper. The difference might be a matter of labeling and semantics, but the Supreme Court of Illinois did not hold that all takings of money are not takings. At most, it held that non-eminent domain exactions of money are not takings. It is perfectly proper to argue in the petition that this exalts form over substance, since an exaction of fungible cash is the same whether it is labeled eminent domain, a tax, or a fee. It suggests desperation, however, to frame this as the question presented.

While I'm as opposed to "predatory taxation" as the next libertarian-leaning guy, I don't know if this is the way to attack it. I don't see an easy way to distinguish the "bad" kind of redistributive taxes from... I hesitate to say "good" here, but "not quite so bad" redistributive taxes for other purposes? I'd LOVE to be able to sue on the grounds that my social security taxes were an unconstitutional taking, but I don't think I'd actually get anywhere.

That said, this sort of thing is precisely the reason that you want, all else considered, as little government as possible. If government has the power and the license to tax whatever it wants, then nobody can afford not to have a hand in the allocation of those taxes - even if you're just minding your own business, the government can decide that you've got an advantage and take your money for redistribution to your competitors.

I doubt that, under current doctrine, you can successfully attack even the most narrowly targeted, insanely high tax. The power to tax is, after all, the power to make sure judges' paychecks don't bounce. There's more than a little self-interest in play...

The handing it over to somebody else in the private sector, rather than the government spending it itself? That might be more vulnerable, as it doesn't hit so close to a central necessity of government.

While I'm as opposed to "predatory taxation" as the next libertarian-leaning guy, I don't know if this is the way to attack it. I don't see an easy way to distinguish the "bad" kind of redistributive taxes from...

Isn't the way to attack it to attack the "bad" kinds of taxes that are indistinguishable from the taxes that don't seem as bad?

The basic question is this: Does the takings clause require governments to divide a tax burden fairly?

In my opinion, in an ideal world, no. The takings clause would only apply to cases where the government want to take a particular property interest and exchange it for its fair value. Ideally, some other doctrine would require taxes to be justly distributed.

I suppose a very good argument against my position is the one raised in the cert pet -- what good is it if the government must pay me fair value for the property it seizes from me if the government can simply pass a law requiring me to immediately return that money?

Isn't the whole notion of "takings" silly when the property taken is money? After all, "just compensation" for taking money is pretty obviously giving the money back.

On an abstract level, it strikes me that takings refers to non-monetary property - land, often - where the specific nature or location of the property makes it useful enough for some social purpose to justify paying market value for it. That can't apply to money.

I'd say that it's exactly right that the takings clause, as the Illinois Supreme Court says, is irrelevant when the property in question is money. Otherwise taxation itself becomes impossible.

I often read on this site that not every bad thing is unconstitutional. Perhaps that applies here.

byomtov: Then would it be lawful for a State government to pass a 100% tax on any payments received in compensation for government takings? If the takings clause protects a substantive right, what is that right?

I doubt that, under current doctrine, you can successfully attack even the most narrowly targeted, insanely high tax. The power to tax is, after all, the power to make sure judges' paychecks don't bounce. There's more than a little self-interest in play...

Bingo. Since most judges are flat-out statists, they have an institutional bias in favor of taxing. Just as they have an institutional bias in favor of judicial intervention. They love to meddle.

I have little doubt that this "tax" will be upheld. And then it will open the door to all kinds of special taxes on individuals. The blog tax, for instance. Or the blog commentor tax.

I doubt it would be lawful, because it would make a sham of the compensation requirement. More generally though, it just seems to me that the notion of "predatory taxing" is not something that falls under the takings clause, for the reason I cite. Teh Illinois case, though, does not fit the situation you describe.

"Just compensation" for X dollars is X dollars. So if you define a tax as a taking then there's no ability to tax, because all taxes must be refunded. That's my whole point.

byomtov: The theory is that a tax burdens and rewards the same group, so you do get just compensation for your tax dollars. It's only when the government wants to take something specifically from you that it has to give something back specifically to you so that your share of the cost of operating a government is not disproportionate.

The theory is that a tax burdens and rewards the same group, so you do get just compensation for your tax dollars.

Sure, but that's very broad relationship. I don't think anyone is going to claim that the value of my benefits from government exactly equals the taxes I pay.

To take a simple and common example, I pay property taxes which go, in part, to support public schools, even though I have no children in public school. You can argue that I get some benefit anyway, but it's surely not as much as someone who does actually use the schools. Am I entitled to a refund because I don't get just compensation? I don't think so, yet under a takings situation I would get compensation.

Suppose, instead, the government took my land to build a public school. The compensation would have to be close to the value of the land. No one would argue that the benefit I get is sufficient, even if I do send children to the school.

In other words, the takings situation requires a reasonably close match in value between what is taken from an individual and the compensation. Not so with taxes.

This is one of those cases that is obvious on its face, but gets murkier and murkier as you dig in to the issue. A tax can't be a taking requiring just compensation for the reasons well covered by others here.

So what, exactly, is the problem with taking from one to give to another? Bill of Attainder? No, the tax code is full of targetted taxes.

It seems to me that, to win, you have to convince the judges that this is not a tax. That may be doable since the money does not go into the government's coffers, but instead is given more or less directly to the mark's competitors. But you still face the problem that government micromanages the economy all the time, intentionally helping some industries and harming others.

More likely, as at least one other commenter has reluctantly admitted, this injustice may have to be corrected at the ballot box.

To take a simple and common example, I pay property taxes which go, in part, to support public schools, even though I have no children in public school. You can argue that I get some benefit anyway, but it's surely not as much as someone who does actually use the schools. Am I entitled to a refund because I don't get just compensation? I don't think so, yet under a takings situation I would get compensation.

The argument would be that you do get just compensation. Simply that this is not a case where "just compensation" means the market value of the property taken.

To put it another way, if those passing the tax didn't believe that you get just compensation for the taxes paid, they would also believe the tax was unjust.

For a tax of broad applicability, "just compensation" is whatever the tax buys you. If it's schools, you also benefit from an educated public that can develop new technology and so on.

It's only when the "tax" or "taking" falls disproportionately on particular individuals that the "just compensation" has to be in the form of a cash payment from the government to you.

Ask yourself this -- why do we have a "Takings" clause in the Constitution? If you look at the early discussion of that clause and the references cited in the cert petition, they argue that it's to vindicate a specific substantive right -- that the burden of paying for the government be distributed equitably among the populace and not unduly allowed to fall where it may by the vagaries of chance and who happens to get in the way.

I guess I find your argument unconvincing. You seem to be saying that all taxes are takings, and for broad-based taxes anything the government does is just compensation. But when the base gets narrow a switch is flipped and suddenly there has to be some very specific thing that can be measurably considered just compensation. That doesn't seem wholly consistent, and it surely opens up whole universes of litigation over taxes. Maybe that's the idea.

Besides, are you sure you want to define things other than cash as compensation for these purposes? Suppose the city has a building it wants to get rid of. Why bother trying to sell it? Get it appraised. Say it's worth $50,000. Then take $50,000 from David Schwartz and hand him the keys as just compensation for the taking. Not very attractive, but if eminent domain really is a two-way street with respect to asset types it's hard to see the problem.

Finally, this whole business seems a little strange. The argument being advanced is certainly controversial, at least. Does that mean that up to now we have no constitutional protection against unreasonably narrowly imposed taxes?

Does that mean that up to now we have no constitutional protection against unreasonably narrowly imposed taxes?

You tell me. If the appellants' theory in this case is rejected, does that mean that there's no constitutional protection against the government simply confiscating your money and giving it directly to someone else? As George Will wrote, is anything stopping the government from "taking revenue from Wal-Mart and giving it to local retailers? Or from chain drugstores to local pharmacies?"

Can they decide that your neighbor needs a car more than you do, and take your family's second car and give it to him?

byomtov: This is a big issue, I agree. And, surprisingly, it's not settled. But the takings clause is clear, private property cannot be taken for public use without just compensation.

Money is property. And the reason this clause exists in the Constitution is specifically to ensure the government imposes its costs on the public fairly and not on whoever happens to "get in the way".

There are quite a few cases that explore the boundary between a tax (not requiring compensation) and a taking (which does). They generally focus on what determines whose property is taken and whose isn't.

Alex Kozinski said it best, "If the government comes into your house and takes [a] Renoir off the wall, you will suffer a compensable loss. You suffer the same loss if
the government comes into your house and seizes an equal value in cash—the two events are indistinguishable for purposes of takings analysis. ... For purposes of the takings clause then, real and personal property are
reduced to their cash equivalents."

I don't know. Phrases like "equal protection" and "due process" swirl through my mind. Whether they are applicable or not I'm not sure. Would a tax on people named "David" pass muster if it weren't for the takings clause? Despite my expressed uncertainty I'd bet it wouldn't.

BTW, I'm not impressed with Will's characterization. It's not a question of whether the government can take from the cas1no (sorry, spam filter) and give to the race track. It is, as Ilya points out, a question of whether it can take from the cas1no, regardless of what it does with the money. Is there something that prohibits the state from subsidizing racetracks?

David Schwartz,

Money is certainly property. My question for Kozinski (and you) is this: They can take my Renoir and give me cash. Can they take my cash and give me a Renoir? If not, why not?

Money should of course be regarded as property, but it isn't in our political system. Private income was socialized by the XVIth amendment. If the government confiscates all the Renoirs in the country, held by wealthy people, that's a taking; if the government raises a wealth tax on all rich people equal to the value of an average Renoir, it's fair. Go figure.

If a private individual takes my money or my property, it's theft and I have redress. If the government does it through a majority-passed statute, I have none. The faulty assumption is that all the government does equals social good. If that were true, all taxes would be voluntary and free-riders subject to social scorn and derision.

Seems to me that the legal profession has no real clue about what constitutes property or public good or a taking. The idea that the law can be an instrument for constraining the expanding interference of politicians in our private lives and in how we use our property is rapidly becoming as obsolete in this country as it is in Europe. Goodbye, law; hello, boundless majoritarianism and unfettered political opportunism. When majoritarianism is absolute, the law becomes a mere inconvenience.

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